Interview with Pam Hymel, e-commerce manager for Capital One

New Orleans CityBusiness, Jul 10, 2006 by Craig Guillot

More than 63 million Americans use online banking. Customers can pay bills, move money between accounts and even apply for loans without visiting a branch at most institutions. Pam Hymel, e- commerce manager for Capital One, says online banking offers customers convenience, service, discounts and better returns. Here she talks about the online banking trends she sees emerging.

What services does online banking offer that would take longer at a branch location?

We offer the ability to service your asset-only accounts. You obviously can't cash a check but you can move money around. You can view the balances in your account, make a stop payment, you can do basically almost any function that doesn't require the physical presence of money. You also have the ability to apply for those accounts online. We also often offer special discounts to initiate that loan process online because it's more cost effective for us to do that. You'll select what branch you want to close it at then you just walk in, sign the papers and leave.

With more people moving to online banking do you actually see fewer customers going into branches?

I do but I think there will always be branches. There was a time a few years ago when people were projecting the branches were going to be nonexistent and you wouldn't need tellers but people still want that personal touch for certain services. But we're looking at how we can do more online to actually reduce that foot traffic into the branch or calls into the call center. You're looking at the ability to do auto decision-making online and looking for the ability through electronic signature or digital authentication for the customer to actually be able to close that transaction online before any documents or anything we need comes through the mail.

In the past year, Internet savings accounts have offered some attractive interest rates. How do they differ from traditional savings accounts?

Those types of savings accounts you will close completely online. You will not go into a branch. Therefore, that's how we can offer that better rate. It's strictly an Internet offering and we do see that becoming more popular. As you continue to enhance your ability to do things over the Internet, you can get that better rate. It's the processing cost that helps offer the better rate. We can do it completely online where there are very few fingers touching it.

Are some segments of the population still a little cautious about doing their banking over the Internet?

We're definitely seeing our enrollments more with the younger generation because they've grown up with computers and are more trusting. For the older generation, we have penetration into that segment, but it's a trust factor and that is trusting the Internet in general. We do have it and we're encouraged but most of the growth in the enrollment is with the younger generations.

How do you reassure customers it is safe to bank online?

One thing to remember is online banking is so heavily regulated. We have certain criteria we actually have to meet. We're audited and looked at very closely for all types of security. We have many programs in place, all kinds of fraud detection systems from either the backend database or looking at a login, how many times you attempt an IP address. There is a lot involved in security inside the site. We put information on the site and on the Web that talks about security and we try to address those concerns directly. There is another regulation coming, which all banks have to comply with by the end of the year, to actually increase the security again. It's another level so we're adding an additional level of security behind the scenes.

How can a customer enhance security while accessing accounts online?

One of the biggest is to not use the same password across multiple systems. Change your password often and come up with something that's very difficult to break. When we changed our password criteria a couple years ago we insisted that customers have a minimum of eight alphanumeric characters. It prevented customers from doing something like 11111 or just using their name, their child's name or pet's name. We're trying to help them take the steps necessary to protect themselves.